The Publication For The Grocery Trade

The Interview - Shloer - Refreshed and Ready To Sparkle

The biggest news in soft drinks this month is that Shloer, the UK number one table top soft drink (AC Nielsen, MAT Dec 2005, figure excl N. Ireland) is set for bigger things in 2006. Owned by the SHS Group since it formally acquired Merrydown in May 2005, Shloer has enjoyed a hugely successful last twelve months, with December sales topping 7 million units, and annual sales of over £23 million. Now, in a £10 million move, Shloer is being refreshed with a brand new advertising campaign and stylish new packaging across the range. To complete the celebration, there's an exciting new variant, Shloer Buck's Fizz. Mike Coppard, Shloer Managing Director, spoke to The Grocery Trader. GT - First of all, who are the SHS Group? SHS is a private company, founded by Joe Sloan and Geoff Salters in 1975. Today it is turning over £320m and employs 700 people across 11 businesses. It positions itself as an FMCG holding company with interests in four core areas: sales and marketing business, brand ownership, corporate services and manufacturing. GT - How did they come to own Shloer? When Merrydown hit problems in the late '90s, SHS came in as a shareholder, and the relationship's continued since then, with SHS handling sales (including national accounts) and acting as a brokerage. SHS understands the Shloer brand from the inside: after an interested bidder approached in the second half of 2004, it was clear the brand was attractive and SHS got into the fray. GT - What other brands do SHS handle? SHS's most high profile brand is WKD, the PPS product managed by Beverage Brands, which goes from strength to strength. They handle the whole Merrydown stable and have acquired British Pepper & Spice: Gordon's Fine Foods condiments: Gourmet Garden Spices: Farm Lea; and ESA, the market research company. They have spent £50 million in total on acquiring other businesses in the past two years. GT - What's happened to the rest of the Merrydown business? Is Chris Carr still involved? Merrydown carries on as part of SHS. Chris is still there, as MD of the Cider Division, the sister business to the Shloer division. SHS Group HQ is based in Belfast: we are all run as autonomous businesses. SHS provides the back-up and we provide the revenue. Unlike being part of a large public company, it's a really positive culture - as close to having your own business without owning it. GT - Looking at the bigger picture, what does the 'Table Top Soft Drinks' category cover, and how big is it at retail prices? Table Top Adult Soft Drinks is a £45 million sector, covering products at the top end of the soft drinks market that are focused on 'slightly special' occasions as opposed to everyday dining. They have varying juice levels, but the content is higher than mainstream soft drinks. They are primarily packed in glass to reflect their premium positioning and in bottles 75cl and above, although smaller handy variants are now being introduced. GT - What share does Shloer have of the Table Top sector? Shloer has 50%. GT - What other brands are in 'TTSD' besides Shloer? Complementary brands include Amé, Appletiser, Belvoir, Aqualibra and J2O. GT - Who's the target consumer? The target Shloer consumers are adults, principally but not exclusively female, and their partners, who are looking for something more interesting, premium and different in their soft drink repertoire, and feel that water is boring and cola is for kids. GT - How fast is the category growing? The market is growing 10% per year. GT - What proportion of the Total Soft Drinks market is TTSDs? The total take home soft drinks market is worth £5.5 billion, of which Table Top Soft Drinks are £45 million. To put it in a sub-category context, Nielsen's adult soft drinks market figure of £439 million includes Table Top Soft drinks plus such 'exceptions' as flavoured waters, smoothies and Ocean Spray, which are packaged, priced and in some instances merchandised differently to Shloer and its immediate peers. GT - What was the rationale behind the re-launch? The Shloer re-launch is all about grabbing the opportunity to unlock consumer interest in Shloer. It centres on two key facts. First, whilst Shloer is a very successful brand, a limited number of people are buying into the category as a whole. Shloer's UK household penetration is now 4.5%, triple the 2002 level of 1.5%, so the consumer base is clearly growing. Second, average purchase frequency of Shloer is currently three times per year, which is in line with the sector average. The key is to raise brand awareness and communicate that whilst these types of drinks may not be for everyday consumption, there are many slightly special occasions where they can be enjoyed. Our recent study with ASDA showed that 70% of shoppers weren't visiting the adult soft drinks feature, so ASDA's sales were only driven by 30% of possible consumers. We did some range streamlining, improved fixture signposting and layout and the category as a whole responded positively with growth of 25%. GT - So what's the Shloer proposition now? 'Sparkling sociability' is the core of the brand. Shloer is natural, fruity and tastes great, something you enjoy when you're having fun. GT - What do you mean by 'Sparkling sociability'? Putting it very simply, sociable people sparkle in a social setting, and so does Shloer. GT - Which multiple grocers is Shloer sold in? It's sold everywhere in grocery, from the top four supermarkets to the regional groups. Elsewhere sales are principally through wholesalers and cash 'n' carries. GT - Can you buy Shloer in the on-trade? 2006 is the first time Shloer's been seriously launched into the on-trade. All the work we've done says there's growing consumer dissatisfaction with the range and choice of soft drinks in the licensed environment. However soft drinks now account for over 14% of sales and as a category is in growth whilst others are now in decline. Interestingly, in the on-trade, 65% of all soft drink sales are at lunchtime, and 75% of those are with food, so there's a clear opportunity to develop the range as lifestyle and habits continue to evolve. GT - Coming back to retail, how fast is the Shloer brand growing year on year? Shloer's growing 7% annually. GT - What's driving this? Shloer's growth is fuelled by delivering what consumers are looking for - quality, naturalness and value for money, supported by our investment in the brand and, I like to think, our focus and TLC. For example at Christmas and other peak times we go to extremes over getting the supply chain right, to try and eliminate shortages and keep the fixtures full. GT - What are Shloer products made with? The base is grape juice. Juice levels are 30% and upwards, depending on the variant. They're made with natural juices and flavourings, and no artificial sweeteners or preservatives. The prime grape source is La Mancha in central Spain. GT - Where is Shloer produced? Shloer production has been outsourced since Autumn 2004, and is now made at three locations - Konings, Belgium; Thomas Hardy in the Lake District; and DCC in Devon, so as the brand grows we're not reliant on a single source. GT - Where does Shloer fit into the drinker's repertoire as an alternative to alcohol? Are you involved in sensible drinking campaigns? A significant number of consumers drink Shloer as an alcohol alternative when socially and have to drive, but this isn't a lead role for the brand. We haven't got into sensible drinking campaigns yet, but it could happen as we move further into the licensed trade. GT - What proportion of Shloer off-trade purchases take place at Christmas? 40% of sales are between November and December, an important time for all soft drinks, and 50% between October and January. Secondary peaks are Easter and summer, but are to be very much the focus going forward. Shloer is seen as something for 'slightly special' occasions: for example the pre Mother's Day week saw sales increase by 25%. GT - What variants are in the Shloer range? White Grape; Red Grape; White Grape & Elderflower; Red Grape, Raspberry & Cranberry; White Grape, Mango & Passion fruit; and Apple & White Grape. GT - What are the pack sizes and RSPs? Shloer is sold in litres, RSP £1.99; 250ml cans - Red & White Grape - are 79p; 4 packs of 275ml bottles - Red & White Grape and Mango & Passion fruit - are £2.99. GT - Which individual SKU is the biggest seller? White Grape 1 litre has 35% of sales, and Red Grape has 24%, then Red Grape, Raspberry & Cranberry and White Grape & Elderflower with around 10% each. GT - Who are the different pack sizes and variants aimed at? The litre size is for sharing with friends or family; the four-pack is for treating yourself; and the 250ml can is for enjoying on the go. GT - You've introduced stylish new packaging across the Shloer range. What was the rationale? The new packs build on the re-launch three years ago. The new pack has a very strong standout on-shelf and communicates the 'sparkling' personality through foil in the main label. It's more contemporary and up to date. GT - Who designed it? When will the new packs be available? The designers were Bloom Design, the Clapham agency. The new packs will be phased in from the end of April and across the summer. GT - You've just finished making the brand new ad campaign. What's the creative concept? The new advertising is all about 'Sparking sociability' and has the theme 'It's Your Sparkle.' It shows people having a whale of a time, and puts Shloer at the heart of it. The commercials are a visual and aural feast with a lot of dance. It comes back to our key issue - Shloer is a great product, but it's not top of mind. This will change all that. GT - Who directed the ads? The director is Michael Gracey, who made the recent Marks & Spencer Christmas campaign and has also worked on many pop videos including, for example, The Sugababes and Will Young. The ad has strong connections to Moulin Rouge, with our director, editor, choreographer and leading lady all involved in one way or another in the film - the leading lady was in fact Nicole Kidman's dance understudy. GT - Is this the first item Shloer's been on TV? No. We were last on TV in 2003. GT - How much are you spending on showing the new TV ads? When do they go on air, and how long will the campaign last? We're spending a total of £5 million on media, £4 million of it on TV. The campaign runs between May and August, then pre-Christmas from November. The ads will be on ITV1, 4, 5 and Satellite and GMTV. GT - Will the ads be running during World Cup matches? The new ads will be showing over the World Cup period, but don't expect to see any during England matches, as that's definitively not our target audience! We're also running high impact women's press and poster ads from June, all based on 'It's Your Sparkle.' GT - You're also planning an innovative PR campaign involving special film screenings. What's the story there? It links back to what the brand's about - 'sparkling sociability' - with outdoor screenings in various UK cities plus a link with women's magazines. Readers will be able to vote for a shortlist of films published on the web and in supporting publications, to be shown in various classy outdoor venues around the UK between August and September. The films will have the common theme of 'sparkling leading ladies'. These will be Shloer events, with sampling and hospitality areas. GT - Is the new Shloer Bucks Fizz alcoholic? Does it contain any additives, colourings etc? Can you mix it with Champagne? It's definitely non-alcoholic, like the rest of the range, and is made with blood orange, orange juice and Shloer White Grape. There are no additives - it sticks to the Shloer promise. You could mix it with champagne, but there's no point as it tastes fantastic on its own! It comes with a champagne closure and has an RRP of £1.99. We've got listings so far in Morrisons and more to be confirmed. GT - Do you publish recipes for making long drinks with Shloer? Yes, we've got long drink recipes on our web site, www.shloer.com GT - Has the Shloer web site been updated as well? It's under way and will reflect the advertising, the consumer research and where the brand's going. The new look site will be up from mid-May. We're looking at how to use it to build our relationships with consumers, and making it simple to use and easy to update and keep fresh. GT - Can you buy Shloer online? We haven't really looked at that yet: we're focusing on selling in retail and the on-trade. GT - What other sampling and promotional activity have you got planned? As well as the film screenings, we've got price activity planned across the range at Easter, Summer and Christmas, whilst the four-pack will feature a Try Me Free offer from mid-summer. GT - How are you working with retailers to help them maximise the Shloer opportunity in store? The adult sector offers great potential for good returns, but the biggest issue it faces is that all too often products are poorly laid out and represented in store and more often than not in a low footfall part of the soft drinks fixture. For best results we advise them to put adult soft drinks adjacent to bottled water and additionally a little signposting works wonders. GT - £10 million sounds like a lot to spend re-launching a £23 million brand. What results do you expect to get for the money? SHS paid £37 million for Merrydown, so they've already spent a great deal of money. As a company SHS only buy brands that are going to win. This latest £10 million investment shows the strength of their belief that the brand is already successful and has the potential to be even more so. GT - Finally, where do you see Shloer going from here? This re-launch is a huge opportunity to develop the brand in all sales channels. If we can move penetration from 4% to 6% of households, and get people buying more than four times a year, instead of three, we'll double our sales.